August 8, 2011 / 8:03 PM / 8 years ago

CANADA STOCKS-TSX plunges 4 percent as fears grow, oil dives

 * TSX tumbles 526.86 points, or 4.33 percent, to 11,635.31
 * Hits lowest since Aug. 25, 2010
 * Cut to U.S. AAA rating shakes investor confidence
 * Falling oil prices weigh on energy shares
 * All 10 sectors lower, led by oil and gas  (Recasts, adds analyst comment)
 By Trish Nixon
 TORONTO, Aug 8 (Reuters) - Toronto’s main stock market index plunged more than 4 percent on Monday to hit a near one-year low, mirroring U.S. stocks and the price of oil, as a downgrade of the U.S. credit rating shook investor confidence globally.
 The fallout from Standard & Poor’s downgrade of the United States pushed world stocks to their lowest level in nearly a year as investors fled equities to the safety of gold and bonds. [MKTS/GLOB]
 “I would refer to it as close to capitulation. Any day when you have the S&P down nearly 500 points and the Dow off over 500 points, I would consider it an emotional panic on the part of investors,” said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.
 At 3:56 PM (1956 GMT) the resource-heavy Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 526.86 points, or 4.33 percent, to 11,635.31.
 Earlier in the session it fell to 11,617.81, its biggest one-day fall in more than two years and its lowest point since Aug. 25.
 The sell-off was broad and deep, led by energy issues. The sector fell 6.7 percent as the price of oil plunged 6 percent, crashing below technical support levels. Suncor Energy (SU.TO) was the most influential decliner, down 6.2 percent at C$30.35. [O/R]
 The economically-sensitive financial sector also weighed heavily, Manulife Financial (MFC.TO) down 8.34 percent at C$12.53, and Royal Bank of Canada (RY.TO) shedding 3 percent to C$48.55.
 Gold-miners were seen as a relative safe-haven investment, with the price of bullion vaulting to a record over $1,715 an ounce. Barrick Gold (ABX.TO) was up 2.25 percent to C$45.90, topping the minority of advancers that were mostly gold miners. Goldcorp gained 2 percent at C$46.29  (G.TO)  [GOL/]
 All told, materials, home to gold-mining stocks, were down 1.25 percent with the index’s gold subgroup helping to cushion losses, up 2.43 percent.
“Concern has been intensifying,” said Elvis Picardo strategist and vice president of research at Global Securities in Vancouver. “But its more like restrained panic than outright panic at this stage.”  (Editing by Jeffrey Hodgson)                  

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